Banco do Brasil, Cielo to create $4.5 bln new card joint venture
BRASILIA Nov 19 (Reuters) - Brazil's largest bank, Banco do Brasil, and card payment processor Cielo SA agreed to create a joint venture worth 11.6 billion reais ($4.5 billion) to manage debit and credit card payments, both companies said in securities filings on Wednesday.
Cielo, which would hold 70 percent of the joint venture's capital, will provide 8.1 billion reais via the sale of debt. Banco do Brasil will have 30 percent of the venture.
Banco do Brasil said the operation will have an impact of 3.2 billion reais in the bank's net profits.
Both companies said on Monday they were in talks to expand the bank's card processing platform.
The deal comes as payment processors in Brazil brace for the end of card brand exclusivity this year.
In recent weeks, Elo, American Express and HiperCard card brands agreed to full acceptance by Cielo and smaller rivals Itaú Unibanco Holding SA's Rede and Banco Santander Brasil SA's GetNet. (1 US dollar = 2.5715 Brazilian real) (Reporting by Alonso Soto; Editing by Cynthia Osterman)
© Thomson Reuters 2016 All rights reserved.